A year-long corporate conflict concerning Mositalmed, OJSC, one of the first-rate medical centers in Moscow, has come to an end recently.
The conflict arose between shareholders of Mositalmed – insurance company MAKS, CJSC and OOO “Start” that belongs to a well-known entrepreneur V. B. Artsruney due to the fact that OOO “Start” has failed to provide the shareholders with a so-called mandatory offer for purchase of shares of Mositalmed, OJSC at market value.
In 2009 OOO “Start” together with its affiliated persons has become the owner of more than 30% shares of the medical center. Later the amount of shares of Mositalmed, OJSC had increased to 51%, however, OOO “Start” had refused to direct an offer on purchase of the shares.
In November 2013 MAKS, CJSC, the owner of 39,9% of shares of Mositalmed, OJSC, filed a suit to the Sate Arbitration Court of the City of Moscow claiming the decisions on the change of company’s managerial bodies taken at the medical center’s shareholders meeting were to be held invalid. In the opinion of MAKS, CJSC, in spite of the fact that 51% of shares were in possession of OOO “Start”, only 30% of shares belonging to the company were to be taken into consideration while making the challenged decisions.
At case at hand a minority shareholder MAKS, CJSC is entitled to maintain the change of the managerial bodies of the company and take decisions regarding the distribution of the net business income.
As was stated by the representatives of MAKS, CJSC, attorneys at law of S&K Vertical, Mikhail Ilin and Julia Andreeva, considering that OOO “Start” has failed to direct a mandatory offer after the purchase of 30% of shares in 2009, the decisions taken at the challenged extraordinary general meeting of shareholders held in 2013, are illegitimate.
In February, 2014 Sate Arbitration Court of the City of Moscow has dismissed the lawsuit with reference to the abuse of rights by MAKS, CJSC. It has come to a conclusion that until the moment of directing of the mandatory offer to Mositalmed, OOO “Start”, that owned 51% of shares, had the voting right arising out of only 50% of the shares of the company. The court judgement as of 14 February, 2014 provided that sec. 7 art. 84.2 of the Law on Joint-Stock Companies, according to which the restrictions regarding the voting stake extend solely to the newly purchased shares that exceed the respective share, was to be applied at the case at hand.
MAKS, CJSC has appeal against the court judgement and the panel of judges has concurred with the arguments of the insurance company. The judges have reversed the judgement of the State Arbitration Court of the City of Moscow, satisfied the plaintiff's claim in its entirety and declared the right of the insurer on corporate control in the company.
The panel of judges has decided that as ab initio (in 2009) OOO “Start” has failed to direct the mandatory offer on purchase of shares, sec. 7 art. 84.2 of the Law on Joint-Stock Companies inapplicable at this case. “Different approach may be used as a means of avoiding of performance of obligation to direct a public offer on purchase of shares, which considerably decreases the degree of protection of economic interests of other shareholders”, - was provided at the judgements.
Therefore, the minor shareholder, MAKS, CJSC has confirmed its right for the full control over the company with the operating income over 700 mln. Rubles in 2013.
Mositalmed, OJSC has subsequently filed a cassation appeal that was considered by the State Arbitration Court of the Moscow District on 11 August, 2014. The panel of judges has upheld the judgement of the court of appeal and dismissed the cassation appeal of Mositalmed, OJSC.